British newspaper publisher Reach said on Tuesday it would cut about 550 jobs – 12 per cent of its workforce – after the COVID-19 pandemic hit circulation and advertising.
Reach, whose titles include the Daily Mirror and Daily Express, said second-quarter revenue declined 27.5 per cent, with print revenue down 29.5 per cent and digital revenue down 14.8 per cent.
Chief Executive Jim Mullen said the company had seen increased adoption of its digital products, with customer registrations passing the 2.5 million mark during the pandemic.
“However, due to reduced advertising demand, we have not seen commensurate increases in digital revenue,” he said.
Shares in Reach, which were at a five-year high of 187 pence in February, were down 8% at 82 pence in early deals on Tuesday.
Jobs will be cut across both national and regional operations, Mullen said, in a plan that will deliver £35 million ($44 million) in annualised savings at an estimated one-off cost of £20 million.
Reach said it will look to bring together its national and regional editorial teams across its titles in a more centralised structure, while also reducing its local commercial and finance sites and simplifying management. But it will end the recent temporary pay cuts for all staff, except senior executives and board members, and invest more heavily in its digital operations amid an increasing shift towards online news. The group did not give details of where the job cuts would fall, though it confirmed plans for “more focused” editorial, advertising and central operations.
“Structural change in the media sector has accelerated during the pandemic and this has resulted in increased adoption of our digital products,” Reach chief executive Jim Mullen said. “However, due to reduced advertising demand, we have not seen commensurate increases in digital revenue. To meet these challenges and to accelerate our customer value strategy, we have completed plans to transform the business and are ready to begin the process of implementation.
“Regrettably, these plans involve a reduction in our workforce and we will ensure all impacted colleagues are treated with fairness and respect throughout the forthcoming consultation process.”
Details of the job cuts came as Reach revealed that group revenues slumped 27.5 per cent in its second quarter to June 28th — dropping as much as 30.5 per cent in April — as sales of newspapers fell sharply amid the coronavirus lockdown, while even digital revenues fell 14.8 per cent despite readers switching online for their news. It said circulation still remains “significantly” below levels seen before the pandemic, although it has seen a “modest but encouraging” improvement in June, with group revenue declines last month narrowing slightly to 23.9 per cent. Digital sales falls pared back to 4.9 per cent in June, while print revenues were down 26.7 per cent.
